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Central bank concerned about steady savings decline

Despite energy crunch, Thailand’s petroleum use rises by 5.4% in first half

Loans continue to grow satisfactorily this year: BOT

Deposit rates likely to rise by 0.25% in 4th quarter: KRC

US to consider lifting anti dumping penalty on Thai shrimp

PTT enjoys 30% profit surge in 2nd quarter

Central bank concerned about steady savings decline

A new Bank of Thailand (BOT) report has expressed concern over the erosion of the country’s savings rate, calling for a national campaign to reverse the situation.

The central bank’s researchers said that the country’s savings had been steadily declining over the past decade, posing a potential threat to both the domestic capital base and growth.

A BOT academic, Kobsak Putrakul, said the overall savings rate in Thailand hit a peak of 35.2 percent in 1991, falling to 30.5 percent in 2003.

More worryingly, he said, household savings which peaked at 14.4 percent in 1989, nose-dived to 3.8 percent in 2003.

Economic policy makers should heed the figures because domestic savings are critical to capital accumulation and growth while reducing the nation’s reliance on overseas borrowing, Kobsak said.

While Thailand’s savings rate is still high compared with other countries, he said this does not mean the country should be complacent, especially when taking into account the long-term current account deficit trend.

He said Thailand should make an effort to boost overall savings rates to 1.8-3.5 percent over the next five years.

Such savings will reinforce the country’s economic stability by ensuring that there will be enough capital to meet the demand of domestic investors without too much reliance on external sources.

Nevertheless, Kobsak said that no single policy can deal with such a complex issue, covering areas such as the pension needs of low-income earners and the country’s increasingly grey population.

He said people need to be less consumer-oriented, and taught about the value of savings.

Young people also need to be educated about personal financial management to enable them to plan their own savings and investment.

At the same time, the BOT academic said the government should use the tax systems to encourage contractual savings, such as life insurance and long-term bonds. (TNA)


Despite energy crunch, Thailand’s petroleum use rises by 5.4% in first half

Thailand’s petroleum use in the first half of this year increased by 5.4 percent on the average in the first half of this year, with the use of natural gas jumping by 9.2 percent, according to the country’s petroleum giant, PTT Public Company Limited (PTT).

Rising consumption continued, despite the world energy crunch and the increased attention energy use is getting in political and financial circles.

PTT’s Vice President for Corporate Relations Department Pongpayak Sathienpakiranakorn disclosed yesterday that the total demand for petroleum, including fuel and natural gas (except that used in the petrochemical industry), stood at 1.184 million barrels a day in the January-June period, an increase of 5.4 percent on average when compared with the same period last year.

The total demand for fuel alone accounted for 743,900 barrel a day, a 3.3 percent increase from the same period of last year.

This included gasoline usage at 127,300 barrels a day, a drop of 7 percent; diesel at 362,100 barrels a day, an increase of 9.1 percent, heating oil 108,600 barrels a day, a decrease of 1.5 percent and aircraft fuel 72,900 barrels a day, a drop of 0.1 percent.

The total demand for natural gas expanded to 440,900 barrels a day, a 9.2 percent increase compared to the same period of 2004, including that used for power generation (an increase by 19.4 percent) and natural gas for vehicles (NGV), an increase of 202.4 percent).

The total supply of petroleum, on the other hand, stood at 1.591 million barrels a day, an average increase of 4 percent over the same period last year, according to Pongpayak.

Imported supplies accounted for 1.045 million barrels a day in total, an increase of 2.5 percent on average, while domestic supply stood at 546,400 barrels a day total, a 7.1 percent increase.

Imported crude oil alone accounted for 845,900 barrels a day, a drop of 0.2 percent, while imported refined oil stood at 47,800 barrels a day, a decrease of 13 percent, Pongpayak said. (TNA)


Loans continue to grow satisfactorily this year: BOT

Total loans will still expand satisfactorily despite a slowdown in consumer loans in the second half of this year, according to the Bank of Thailand (BOT).

Tarisa Watanagase, BOT’s deputy governor in charge of the Financial Institutions Policy, disclosed yesterday that loans extended in the country’s financial system had outgrown those in the banking system.

In the first half of this year, loans extended in the banking system had grown at a slower pace of 6.4 percent because those provided to overseas bank branches experienced a negative growth.

“Actually, loans extended by commercial banks to local entrepreneurs rose up to 11 percent in the first half of the year, while those in the second quarter have yet to be released,” she said.

“But given the overall money inflow in the economic system, it is believed that loans will enjoy a two-digit growth. Extended most are loans for the production and industrial sectors,” she noted.

Tarisa said the central bank had not set a target of how much total loans are expected to expand.

However, it is satisfactory to see loans grow at a higher rate than that of the economy.

Whether the loans would continue grow at higher rate in the future depend on economic conditions, she said.

Tarisa reported that non-performing loans (NPLs) amounted to around 14 billion baht in the first half of this year, compared with 35 billion in the same period last year and 50 billion in the corresponding period of 2003, showing a gradual decline. (TNA)


Deposit rates likely to rise by 0.25% in 4th quarter: KRC

Local deposit rates are likely to edge up by at least 25 basis points in the fourth quarter of this year, followed by an increase in lending rates by the same level, according to the KASIKORN Research Center (KRC).

The leading think tank reported yesterday that interest rates in the local financial system have gradually risen. This appears to be in conjunction with the Bank of Thailand (BOT) raising the policy interest rates in August 2004 and some commercial banks raising long-term saving rates late last year.

Interest rate hike by local commercial banks have also gained momentum with deposit rates showing a significant turn since July 2005.

Of late, major commercial banks have begun to increase deposit rates of all categories for corporate customers and to raise 6-month fixed deposit rates for general clients.

KRC viewed the deposit rate hike, particularly by major commercial banks, might be caused by their need to curb the outflow of deposits to small- and medium-sized banks and foreign banks’ branches, which offered higher deposit rates.

It projected that partial deposits would flow into the secondary market, where more investors are keen on investment in fixed income funds.

Other factors that accelerate the interest hike include the BOT’s concern over higher inflation rates, continued increase in the policy interest rates, and absorption of liquidity from the financial institutions system.

In the second half of the year, KRC forecasts that the interest rate hike by commercial banks will continue to proceed and the banks will manage to lend out approximately 150-170 billion baht, compared with 150 billion in the first half of the year.

It is likely that the banks will raise the short-term deposit rates by 0.25 percent in the final quarter of this year and then edge up the lending rates by the same level.

Meanwhile, Bangkok Bank Public Company Limited (BBL) said yesterday that it was considering raising its deposit rates and would announce its decision soon. (TNA)


US to consider lifting anti dumping penalty on Thai shrimp

The US International Trade Committee (USITC) is considering lifting Washington’s anti dumping measure against Thai shrimp exports.

Four representatives of the USITC who visited shrimp farms in Phang-nga, one of the country’s six southern Andaman provinces hit by the last December tsunami, promised that they would report damages and the plight of Thai shrimp breeders and exporters to the authorities concerned, according to President of the Andaman Shrimp Breeding Association Taweesap Chuaychantra.

The officials also pledged that the USITC would consider lifting the anti dumping penalty on Thai shrimp exports, Taweesap disclosed.

“Lifting the anti dumping measure against Thai shrimp exports will increase Thai shrimp exports to the US market and boost its prices”, he said.

“We have asked for the USITC assistance by lifting the anti dumping measures against Thai shrimp exports and they have promised to review the issue”, he said.

The price of Thai shrimp has steadily dropped since the anti dumping measure was imposed months ago.

The last December tsunami has worsened the local shrimp breeding business. (TNA)


PTT enjoys 30% profit surge in 2nd quarter

PTT Public Company Limited (PTT) said yesterday that it had posted a net profit of more than 18 billion baht, up 30 percent, in the second quarter of this year, and 36 billion, up 39 percent in the first half of this year, due to higher energy prices.

PTT’s President Prasert Bunsumpun reported that the company enjoyed continual revenue and profit growth in the second-quarter performance of this year.

One of the highlights was a 21 percent increase in the overall supply of products by the gas separation plant. This is due to the full-steam operation of plant unit 5, which is the country’s largest. Also a factor is the rise in revenue of its subsidiary Rayong Refinery Co., in which PTT has increased its stake from 36 percent to 100 percent.

He said total revenue earned by PTT and its subsidiaries in the second quarter was 226.29 billion baht, up 50 percent from the same quarter last year.

EBIDA (earnings before interest, depreciation, and amortization) was 28.33 billion baht with a net profit of 18.36 billion, or 6.56 baht per share. This is a 30 percent increase from the same quarter the year before.

Around 56 percent of the profit stemmed from revenue earned in the petroleum exploration and production, chemical, and refining businesses, 40 percent from natural gas and 4 percent from the oil business.

In the first half of this year, PTT and its subsidiaries earned total revenue of 417.45 billion baht, a surge of 45 percent from the corresponding period last year.

EBIDA was 53.23 billion baht, up 43 percent, and net profit was 36.61 billion, up 39 percent.

Most of the profits stemmed from earnings of its subsidiaries.

PTT remains a listed company with the biggest market capitalization of around 660 billion baht, or 14 percent of the total.

If combined with its subsidiaries, PTT’s market cap is around 1.2 trillion baht, or 26 percent of the total market capitalization.

At the end of the second quarter, PTT’s total assets were 480.25 billion baht, with liabilities of 268.65 billion, and shareholders’ equity of 211.69 billion.

The company’s debt-to-equity ratio is 0.5:1. (TNA)